Voda, O2 May Have To Give Up Spectrum For UK-Wide Broadband

Media and telco regulator Ofcom wants to force Vodafone (NYSE: VOD) and O2 to give up their portions of the 900 MHz mobile spectrum to allow another operator to provide wireless broadband in rural areas.

The government, as set out in its wide-ranging but poorly received Digital Britain policy review last month, wants to guarantee broadband access of a meagre 2Mbps to all citizens by 2012. Despite fixed-line telcos widening their footprints in recent years, it’s thought only wireless can guarantee connectivity in many corners of the UK.

The government has given carriers until April to agree their own proposal, but Ofcom today set out the moves that will be made if the industry fails to agree a voluntary solution. It calls on Vodafone and O2 to relinquish the two portions they each hold of the 900 MHz band through an auction, allowing a third operator to provide a new service. Research out yesterday forecast nearly half of European broadband connections would be mobile by 2014.

Voda and O2 won’t like it – in 2007, the pair rejected an earlier Ofcom proposal on the same matter. Communications minister Lord Carter, who drew up Digital Britain, met bosses from UK carriers yesterday. Release and consultation.